BlueMatt's Blog On Building a Bitcoin for Everyone

Remarks on The State of Bitcoin

This is an excerpt of the remarks I gave at this year’s annual Coincenter Diner.

I want to take this opportunity to do the cliche thing of forcing all of us to reflect a bit on where we came from, since I’m told we’re the future of finance. It’s all too easy to be perennially focused on what comes next and how we still have lots of room to grow. But for those of us who’ve been in this industry for fifteen years, it’s sometimes much too difficult to recall where we were in 2011.

So, let’s go back to 2011. At the end of 2010 bitcoin had made the front page of Slashdot several times (for those of you who are too young, Slashdot was Reddit before Digg was Reddit) and a sudden influx of always-online geeks had found Bitcoin and started finding ways to contribute to the growing community of people weirdly obsessed with a valueless token.

Even back then, people came to Bitcoin from many paths. Some libertarians jumped on Bitcoin early, seeing the first digital currency that genuinely didn’t require a third-party as a real chance to disconnect money from the state. Cypherpunks, of whom Satoshi was undoubtedly one, saw digital currency as a way to extend their success in privacy and free speech protection through software to money, bringing privacy and censorship-resistance to the most important tool required to function in a modern society. Some geeks simply found it fascinating that we could build a totally self-contained currency on top of a distributed network using proof of work.

But no matter why you came to Bitcoin, one way or another it always had to do with removing a trusted third party from your financial world. This reduction in trust had a cost, yes, often worse UX including notably a highly fluctuating price. But freedom always does. Still, for the first time in the modern era this Bitcoin thing gave everyone in the world an option to opt out. This option isn’t always used, and in fact often doesn’t even have to be used to accomplish its goal - this credible alternative that suddenly existed played a critical role in platforming and ultimately getting regulators comfortable with stablecoins.

But I get ahead of myself. In the ten years since Microsoft last accepted Bitcoin for payment, the crypto world got a whole lot bigger than Bitcoin. First there were lazy scams, but eventually people started building new platforms for new types of assets and use-cases that didn’t make sense on Bitcoin. Crypto experienced a cambrian explosion of not only projects, but also proposed use-cases. Yet somehow nearly all of it continued to trace its roots back to the concept of finance without trusted third parties…or at least not the same trusted third parties as various projects experimented with reintroducing trust to regain efficiency. In the craze of multiple cycles of crypto mania, this trustless property was expanded to so many lofty goals, few of which worked out. After all, it wasn’t particularly likely that blockchains were suddenly going to solve wealth inequality; it is just a new money.

But, fast forwarding to today, that mania appears to have faded. Despite Bitcoin being up 15% since mid-August, the vibes couldn’t be lower. Five years ago if you threw a rock across the street in the Bay Area it’d hit three crypto VCs before touching the ground. Today, there hardly exist any crypto VCs - the deals simply aren’t there to sustain an entire fund on crypto alone. No, now every last shred of capital is seeking returns on AI rather than crypto.

In many ways, looking beyond price, this feels like the deepest bear market yet. The rush of talent abandoning the space and moving to AI has been head-spinning.

Yet these technologies are genuinely unlocking freedom around the globe. Finance companies large and small are finally integrating crypto, if often only stablecoins. In many cases these are unlocking cheaper and more reliable ways to pay across borders, financial services free from otherwise-substantial corruption, or the freedom to access currencies that have substantially lower inflation in ways never before broadly accessible.

Globally, nearly everyone knows what Bitcoin is. And much more surprising to me is everyone seems to largely know what Bitcoin is for. When Canada threatened to shut down the truckers protests during Covid by preventing bank access, rather than arresting the protesters, many immediately sought out Bitcoin. People around the world, in every culture are investing in Bitcoin as a hedge against a financial system they know the problems of all too well.

No, people don’t use Bitcoin or even stablecoins for regular daily purchases much of anywhere, but an intuitive understanding that Bitcoin exists for when you need to opt out appears to be pervasive, across billions of people and thousands of of cultures.

Maybe that’s all we’ll ever be - an option to opt out if the system one has access to no longer meets their needs. Or maybe there are already billions in this world, including millions of people and businesses in this country, for whom the system, today, does not meet their needs.

My ask to all of you, as we find our place in this new world, is to focus on what sets us apart. Rebuilding the financial system with regulatory arbitrage and replacing a credible opt out with a parallel, and in many ways similar system, is not providing the kind of societal benefit Satoshi sought. Yes, reintroducing trust has enabled the kinds of experiences that continue to drive adoption today, but when you think about the products you wish to offer, think hard about whether you can also include the kind of credible alternative you would want if your government were trying hard to keep the music going and you wanted nothing more than to get out. You never know, you, or this industry, might always find itself on the other end of debanking (again, depending on who you ask).

In much of our work we end up focusing on providing financial freedom for a global citizenry. In many cases these are fundamentally American ideals we’re exporting to the world. To steal a quote, America was founded on the idea that people can be trusted with dangerous things. I can think of nothing more dangerous than a populace that controls their own money and can spend it to amplify their own speech. This industry builds tools dangerous to bad governments more than any other industry, and it remains critical that we be able to do this work here in America.

Bitcoin Has a Golden Opportunity With AI Agents, It’s Time to Build

This post originally appeared as a guest post in Bitcoin Magazine.

Bitcoin finally has a real payments advantage in the world of agentic payments. We all have to pitch in to capitalize on it.

For all of bitcoin’s life, it has been fighting an uphill battle against fiat currencies that mostly do the job of being money. Obviously, fiat has plenty of issues, but when it comes to impacts immediately visible to everyday people in much of the world, bitcoin isn’t 10x better. Some may even conclude that they would prefer a system based on neutral money to government-rigged ones, but entrenched fiat systems work well enough that few want to deal with the hassle of constant conversion. With the rapid growth in agents’ capabilities, a huge gap has opened that bitcoin has a shot at filling. Instead of competing with entrenched interests as you would with fiat, in the agentic payments field, everyone is starting from zero.

In a recent post on Spiral’s Substack, I pointed out that all of the payment standards being developed for AI agents haven’t yet gotten off the ground. Credit cards won’t work in a world where automated tooling is making purchases. The web is filled with captchas and heavy investments in blocking bots, rather than enabling their use for commerce. Even if they offered payment methods that agents could use, few merchants today have websites that agents can reasonably navigate. No matter what payment method agents ultimately use, it will require every merchant to adapt to a new world.

With no one company owning both the agent and merchant sides of the marketplace, this leaves a wide-open opportunity where it’s still anyone’s game. Better yet, with the popularity of open-source agents today, no company owns much of the purchasing side at all! If the bitcoin community plays its cards right, there’s a good shot at a large part of the future of commerce flowing over open rails not controlled by any single company.

There’s still a lot to build, however, and nearly every payments industry player is trying to position itself to take the crown. Visa is working on an “Intelligent Commerce” product, OpenAI and Stripe announced the Agentic Commerce Protocol (ACP), Google announced AP2 and Coinbase announced an extension of it for crypto - x402. The bitcoin community’s lack of central planning makes responding with their own options more chaotic and harder to follow, but that’s also its strength: lots of people trying lots of different approaches to achieve the same goal are more likely to succeed than a single, focused approach that might be wrong.

With Lightning surpassing a billion dollars in monthly transactions and Square enabling Lightning for its in-person merchants, it seems the technology is finally here that will let bitcoin cross the chasm and become everyday money. Some ideological merchants have been accepting bitcoin for years, and as we continue to integrate bitcoin wallets into agents, we’ll create yet more reasons for every merchant that wants to sell things to join in. But for that to work, bitcoiners have to step up and use the tools at their disposal. If people aren’t trying to buy things with bitcoin, merchants won’t care.

Luckily, these days, you don’t need code to build tools that find merchants accepting bitcoin payments. You don’t even have to sell your stack to buy things with bitcoin. Install an agent, give it a wallet, give it some bitcoin, and tell it to go buy your monthly beef tallow subscription. Tell it to email merchants it wants to buy from and ask them to support bitcoin. Point it to the Bitcoin Merchant Community and have it explain to any merchant it comes across that it wants to pay them without Visa taking a cut but wasn’t able to.

Thanks to extensive existing work, bitcoin is already one of the best ways to enable automated online commerce. Instead of merchants having to fill their sites with captchas to prevent bots from using stolen credit cards and dealing with chargebacks, many bitcoin payment processors can provide merchants with local currency within a day. Instead of being exposed to the risk that an operator’s single private key could seize their stablecoins, merchants can choose from many payment processors, whether foreign or domestic. This competition drives down fees and means we’re not building new payment rails on a platform that will inevitably seek higher rents once its dominance is cemented.

These issues aren’t top of mind for most, but we must get the new rails right. Stablecoins look great at first glance, but moving to a world where one company (Coinbase) owns both the platform (Base) and earns all the interest on the currency’s float (USDC) where payments are made is not a recipe for long-term success. Once everyone is locked into using one payment method, switching away as the operator increases fees won’t be practical. It doesn’t matter whether the protocol agents use to communicate with merchants is based on some “open standard.” If the vast majority of agents have funds on only one platform and the vast majority of merchants accept funds on only one platform, switching will be impossible.

While bitcoin has come a long way on its journey to becoming a reserve asset, it is only beginning its path towards everyday money. Bitcoin reaching escape velocity on the first does not imply that the second is guaranteed; in fact, far from it. With so much competition from every payments industry player, not to mention stablecoins, there’s a lot of outreach and work to be done to build payment momentum. Still, we can’t let this opportunity pass us by. If you believe commerce should happen on neutral money rather than corporate gatekeepers, it’s time to get to work.